The outlook is turning grim for the US economy, or so a range of soft data and forecasts advise. But while expectations are deteriorating at the moment, the hard data continues to reflect a growth bias. Short of an epic, sudden (and at this point unexpected) collapse in business activity and/or consumer spending, the US economy will continue to expand for the near term. What happens beyond the next several months is unclear, which is par for the course. The crowd, however, is becoming increasingly pessimistic, which raises the question: Will the next recession become a self-fulfilling prophecy?
Macro Briefing: 17 June 2022
* Putin continues to wield Russia’s energy weapon with a deft hand
* China launches its third, most advanced aircraft carrier
* More than 60% of executives see recession in next 12 to 18 months
* European leaders lay out path to European Union membership for Ukraine
* World Trade Organization changes global trading rules for first time in years
* Cosmetics maker Revlon files for bankruptcy, citing supply-chain disruption
* Philly Fed Mfg Index turns negative in June
* US jobless claims tick lower, but still reflect strong labor market
* US housing starts fall in May to lowest level in more than a year:
10-Year Treasury Yield ‘Fair Value’ Estimate: 16 June 2022
The Federal Reserve’s 75-basis-point hike for its target rate on Thursday — the biggest increase since 1994 — signals that the central bank is increasingly committed to fighting inflation.
Macro Briefing: 16 June 2022
* Chinese leader restates support for Russia on “sovereignty and security” matters
* Three European leaders visit Ukraine as US pledges $1 billion in new security aid
* Federal Reserve hikes interest rates 3/4 percentage point
* Business inflation expectations are relatively steady in June
* NY Fed Mfg Index reports second month of contraction in June
* US homebuilder sentiment falls to two-year low in June
* US retail sales fall in May, posting first monthly loss this year:
Monitoring Risk Appetite With ETF Pairs
The trend has turned ugly, at least for the usual suspects in the land of asset classes. The question is when will it be comparatively safe to start raising risk exposures? Unclear, but when the tide begins to turn we’ll likely see early clues in price trends via several ETF pairs.
Macro Briefing: 15 June 2022
* Biden may ease some of Trump’s China tariffs
* Fed today may announce biggest rate hike since 1994
* European Central Bank starts emergency meeting after bond-market sell-off
* US mortgage rates jump sharply: national average at 6.28% for 30-year fixed
* Crypto firms lay off staff, freeze withdrawals as digital coin prices tumble
* China industrial production posts modest rebound in May
* US wholesale price inflation up 10.8% in May, near annual record
* US small business sentiment eased to new record low in May
* US Dollar Index holds near 20-year high:
S&P 500 Risk Profile: 14 June 2022
A common definition of a bear market is a 20% stock market decline. By that standard, the S&P 500 crossed that Rubicon yesterday (June 13) for the first time since the pandemic crash in March 2020 as the market’s drawdown reached nearly -22%.
Macro Briefing: 14 June 2022
* Ukraine conflict could last 10 years if Russia isn’t pushed back, analysis warn
* China delivers its sternest warning to date re: US support for Taiwan
* Markets consider the odds of a 75-basis-point Fed rate hike on Wednesday
* 2yr/10yr Treasury curve inverts, flashing new recession warning
* Foreign stocks stabilize after Wall Street selloff on Monday
* Bitcoin falls sharply after crypto lender halts bitcoin withdrawals
* US 10-year Treasury yield jumps to 3.43%, an 11-year high:
Commodities Edged Up Again Last Week As Everything Else Fell
Broadly defined commodities posted another gain for the trading week through Friday, June 10 while the remaining slices of the major asset classes fell, based on a set of ETF proxies.
Macro Briefing: 13 June 2022
* Fed Chair Powell may face choice between inflation or recession
* Another Fed rate hike expected this week, and more to come
* “Ferocious” outbreak of Covid in Beijing raise doubts about China’s reopening
* UK economy contracts for second month in April
* US dollar’s rise to 20-year high translates to hefty losses for US Firms
* The worst of the global food crisis may lie ahead
* Bitcoin falls below $24,000, lowest since Dec. 2020
* Consumer sentiment in US slumps to record low in early June
* US consumer inflation rises to annual rate of 8.6% in May, a 40-year high:
